Hertha Metals uses a continuous reaction system that can process iron ore of any grade, using natural gas or hydrogen as a reducing agent. — Hertha Metals

Hertha Metals is a startup that plans to produce high-purity iron for rare earth magnets made in the United States. These rare earth magnets are core components of the F-35 fighter jet and missile guidance systems. The company announced the completion of a $133.65 million Series A funding round, which includes a $65 million investment from the Pentagon.

The funding round comes as the Trump administration seeks to break China's supply monopoly in critical minerals for U.S. defense and high-end technology. Laurin Merue, founder and CEO of Hertha Metals, said the U.S. government investment was jointly funded by the U.S. Department of Defense's Industrial Base Analysis and Sustainment program and its economic defense department.

A Pentagon official said the Department of Defense would not comment on speculation about potential deals. The Conroe, Texas-based company will use the funds to finance construction and initial operations of a plant called Chalyx, which costs about $100 million.

The company plans for the plant to produce 10,000 tons of high-purity iron and steel annually, mainly supplying U.S. magnet manufacturers.